Rates of Tax

Types of Tax Rates
Tax rates apply to individual people on salaries or wages, to businesses and to other entities such as trusts or non profit organisations etc.

Sole traders, partnerships, companies and non-profit organisations are the 6 main types of taxpayer entities. The rates for income tax vary depending on the type of entity and whether it is a business or other.

  1. Individuals These are the people who are employed by a “boss” (employee) and have tax deducted from their earnings at th source before they receive the net amount (after tax).

  2. Sole traders. A sole trader is a person trading on their own. Taxed at individual rates as shown in chart below.

  3. Partnerships. A partnership is where two or more people run a business together. Each partner is taxed at individual rates as shown in chart below

  4. Companies. A company is a separate legal entity in its own right who pay a company tax rate. Taxed at .30c in the dollar.

  5. Trusts and trustees. Tax payable by a trustee for income retained by a trust. Taxed at .33c in the dollar.

  6. Non-profit organisations. Tax payable by a non-profit organisation.Can be taxed at .33c in the dollar.

Calculation by Individuals
Taxable income Tax rate for every
$1 of taxable income
(excluding earner levy)
Tax rate for every
$1 of taxable income
(including earner levy1)
up to $14,00012.5 cents 14.2 cents
$14,001 to $48,000 inclusive21 cents22.7 cents
$48,001 to $70,000 33 cents34.7 cents
$70,001 and over 38 cents 39.7 cents
No notification 45 cents 46.7 cents

Example 1

John's total taxable income for the year was $65,238.

Here is how to work out the amount of tax due on the income:

$0 to $14,000@ 12.5%= $1,750.00
$14,001 to $48,000@ 21%= $7,140.00
$48,001 to $65,238@ 33%= $5,688.54

Therefore the tax due on John's income of $65,238 was $14,578.54.